MGMT 425 Ch. 1 UL

Cultural differences have no effect on the way an international firm conducts its business around the globe.

False

. The purpose of the Uruguay Round negotiations was to

Lower trade barriers

1. When nations lowered trade barriers it made the globalization of markets a possibility. What was needed to make this possibility a reality?

technology

In terms of conducting international business in China, it can be said that

China represents a large -- basically untapped -- market.

1. The globalization of markets and production implies that

Domestic firms are facing intense competition from foreign firms

Which statement accurately describe the global economy in the twenty-first century?

a. More nations are becoming part of the developed world.

1. While studies shw that the share of labor in national income has declined over the past two decades, experts caution that in reality the decline has only affected

unskilled labor

1. At some point, rising income levels lead to demands for greater environmental protection and, as a result, pollution levels fall. A study by Grossman and Krueger found this generally occurred before per capita income levels reached

8000

Uber can best be described as?

An international Business

1. What is a challenge faced by companies entering the global market?

Differences in consumer taste and preferences

Globalization resulted in a decrease in non-U.S. firms' investment across national borders.

False

1. Influential economists, politicians, and business leaders who favor globalization argue that

Falling barriers to international trade

What issue might be raised at an antiglobalization demonstration?

Falling barriers to international trade results in job losses in those industries targeted by foreign competitors.

The commercial jet aircraft market can be best described as a

global market

1. By the year 2018, ____ of the world's population were Internet users.

more than half

1. Which global institution is the successor to GATT?

a. World Trade Org

1. What global institution was established on October 24, 1945 and one of its key purposes is to maintain international peace and security?

United Nations

1. There have been two notable trends in the demographics of multinational enterprises since the 1960s. These include _____.

a. the rise of non-U.S. multinationals b. the growth of mini-multinationals

1. It is suggested by economists that the richest nations of the world can help struggling nations by reducing trade barriers especially for _____ imports.

agricultural

Opponents of globalization argue that falling trade barriers

allow firms to move manufacturing activities to countries with lower wage rates.

Small and medium-sized companies do not typically benefit from the globalization of markets.

false

The presence of McDonald's in Tokyo, the opportunity to easily buy iPads in Rio and Berlin, and the ready availability of Gap jeans in Paris as well as San Francisco are examples of

the emergence of global markets for consumer products.

True or False: Supporters of globalization argue that bodies such as the World Trade Organization and the United Nations exist to serve the collective interests of member states, not to subvert those interests.

true

True or false: Many economists maintain that the power of organizations like the WTO is limited to what nation-states collectively agree to grant.

true

When a company invests in a company or entity outside its home country, it is participating in

Foreign direct investment

Foreign direct investment occurs when a firm invests resources in

business activities outside its home country.

The series of democratic revolutions that swept the communist world, led to the downfall of the Soviet Union, and opened markets in other nations occurred around _____.

1990

While U.S. firms accounted for about two-thirds of foreign direct investment in the 1960s, as of 2019, U.S. firms account for _____

28%

Since the 1960s, a notable trend in the demographics of the multinational enterprise has been the rise of U.S. multinationals.

False... it is the rise of non U.S. multinationals and the growth of mini-multinationals

Mallory's US-based lifestyle company decides to invest in an Italian company that specializes in health and wellness. This would be an example of

Foreign direct investment

In the years leading up to the Great Depression, what practice created a barrier to international trade?

High tariffs on imports of foreign goods

The globalization of markets is facilitated by the

Improvement in transportation technology

The ________ is often seen as the lender of last resort.

International Monetary Fund

The main factor driving Apple's decision to locate its iPhone production in China was _____

speed

In terms of economic growth, current indicators suggest that there will be ______ among the world's _____ nation

stagnation..poorest

The growth of trade as a percentage of global GDP

suggests that the United States is increasing its role as the most dominant player in global trade.

From the 1990s until today, foreign direct investment inflows can best be described as

surging and slumping

The ________ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire to promote economic development.

World Bank

1. Based on the fact that the volume of world trade has been growing faster than world GDP implies that the economies of the world's nation-states are becoming

a. More intertwined

1. What is an accurate description of microprocessors?

a. They can decode vast amounts of information.

An international business is defined as

any firm that engages in international trade

Declining Trade Barriers

better ability to export goods

1. Which environmental concern has been found to rise steadily with higher-income levels?

carbon dioxide

1. Based on current trends, the economy of _____ could ultimately be larger than that of the United States.

china

The G20 is comprised of ______ from the 19 largest economies in the world.

finance ministers

Apple's investment in production facilities in China to produce its iPhone can best be described as

foreign direct investment

1. ______ refers to the shift toward economic international integration.

globalization

Brining traditionally separate national markets into one cohesive marketplace

globalization of markets

1. The ______ has developed into the information backbone of the global economy and reduced the constraints of location, scale, and time zone.

internet

1. What is an accurate depiction of containerization?

lower cost

1. Beginning in the 1970s, European and Japanese firms began to shift labor-intensive manufacturing operations to developing nations with _____.

lower labor cost

Globalization critics argue that the decline in unskilled wage rates is due to the

migration of low-wage manufacturing jobs offshore.

1. The doubling of the power of microprocessor technology while the costs of its production decreases by half is called ______ Law.

moores

_____ predicts that a. microprocessor technology power will double approximately every 18 months.

moores law

Technological innovations and low-cost transportation have reduced the cultural distance between countries and are bringing about some convergence of consumer tastes and preferences.

true

Today, nearly every nation in the world belongs to the United Nations.

True

While there are a large number of nations that are members of the WTO, these nations account for only a small portion of world trade.

false

Which of the following expresses one of the reasons why managing an international business is different from managing a purely domestic business?

An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system.

. International trade occurs when a company

Exports goods or services to consumers in another country

1. Which statement accurately describes the globalization of markets?

National differences in tastes and preferences for consumer products is an important factor that acts as a brake on globalization

The restrictions in Paris that make it difficult for Uber to conduct business in the city are an example of ________ differences between national markets that require companies to customize their strategies to the local market.

Regulatory Regime

Uber's ability to view the world as its market illustrates?

The globalization of markets

Which of the following statements pertaining to changes in the global economy of the 21st century is true?

The world is moving toward an economic system that is more favorable for international business.

1. Through the 1960s, which country dominated world foreign direct investment?

US

1. The text lists several reasons that stand out as the cause for economic stagnation in the world's poorest countries, including which three of the following?

Totalitarian governments Prolonged civil war Poor property rights protection

A small country is short on cash for much needed infrastructure development projects. It could go to the World Bank for assistance.

True

One concern frequently voiced by those opposed to globalization is that falling barriers to international trade destroy manufacturing jobs in wealthy advanced economies such as the United States and Western Europe.

True

Supporters of globalization believe that tougher environmental regulations and stricter labor standards are a natural aspect of economic progress.

True

Which of the following factors contributed to the Great Depression of the 1930s?

countries progressively raising trade barriers against each other

Apple's production presence in China does what?

creates both low skilled and engineering level jobs

Globalization has enabled organizations to reduce their costs of production by

creating manufacturing units in developing countries.

1. As figures for 2019 reflect, the globalization of the world economy has resulted in a relative _____ in the dominance of U.S. firms in the global marketplace.

decline

What are the two macro factors that underlie the trend toward greater globalization?

decline in trade barriers technological change

1. Distribution of production to separate locations has become more economical for companies because transportation costs have _____.

declined

1. Creating and managing a globally dispersed production system is facilitated by the ______ real costs of information processing and communication.

decrease in

Which of the following actions was implemented in the Uruguay Round, finalized in December 1993?

establishment of the World Trade Organization

1. An IMF study implies that the earnings gap between skilled and unskilled workers has _____ over the past two decades.

grown 25%

enhanced communication technologies

growth in e-commerce

The risks of doing business in countries that are facing revolutions is

higher than in countries not facing revolutions.

Supporters of globalization suggest that a solution to the problem of slow real income growth among unskilled workers is _____ society's investment in education.

increase

1. The outward stock of foreign direct investment has _____ for the world as a whole since 1995.

increased

1. The globalization of _____ refers to the fact that producers can source goods and services from anywhere in the world to take advantage of cost savings.

production

1. The development of the microprocessor has lead to _____.

reduce cost of global communication

The purpose of the U.N.'s Millennium Development Goals that were established in 2000 was to

reduce the number of people living in extreme poverty.

1. The decline of the United States' standing as a dominant industrial power is considered a(n) _____ decline because it reflects the faster economic growth of other economies.

relative

1. The number of mini-multinationals involved in international trade and investment is ________.

rising

Evidence suggests that _____ has impacted the declining share of national income for unskilled labor more so than globalization has.

technological

1. While the lowering of barriers to trade made globalization a theoretical possibility, it wasn't until the introduction of _____ that it became a reality.

technological change

1. Some U.S. hospitals outsource radiology work to India. This is a recent advancement that is possible because of advancements in _____.

technology

The primary reason Apple established production facilities in China for its iPhone was to capitalize on

the ability of subcontractors to rapidly respond to changes in demand

The stock of foreign direct investment refers to

the total cumulative value of foreign investments as a percentage of the country's GDP.

What is an accurate depiction of Latin America when considering international business? a. While favorable economic trends have recently occurred, _______

there is no guarantee that they will continue

1. One of the global institutions that emerged over the past 75 years is GATT which stands for the General Agreement on Tariffs and _____.

trade

Boeing's 787 aircraft is produced by 50 suppliers spread around the world, a huge increase in global outsourcing as compared to the past. Boeing's strategy, like that of other multinational companies, suggests that declining bariers to _____ and _____ are facilitating global production

trade and investment

1. According to the critics of globalization, increased free trade and investment over the past few decades have

widen gap between rich and poor

1. Which organization would help out a cash-strapped government with a low-interest loan to help that country build new roads?

world bank

1. Which organization is responsible for policing the rules of trade between nations and making sure countries adhere to the rules of trade treaties signed by member states?

world trade organization

1. Critics of globalization protest in order to diminish the impact of the culture of _________ on the world.

multinational enterprises

Uber currently operates in about 600 cities across more than 80 countries. Which driver of globalization best explains the ability of Uber to pursue this strategy?

Technological Change

The text notes that there are two macro factors fueling the trend toward greater globalization. These two factors focus on a decline in trade barriers and

Technological change

1. Boeing outsources a large portion of its production. For example, for its most recent jet airliner (the 787), nearly ______ of the total value of the aircraft is outsourced to foreign companies.

65%

During the 1920s and 1930s, when high tariffs were placed on imported manufactured goods,

Increase in trade barriers resulted

A company is involved in foreign direct investment when it

Invest in business act our of home country

When describing the value of FDI over the last 30 years, it can be said that

It had grown significantly

1. Those who promote the idea of free trade say that one way for the world's poorest countries to improve their situation is to _____.

a. Adopt economic policies based on free market economies

1. At the shipping port in Charleston, South Carolina, the large shipping boxes that arrive on superfreighters from Indonesia are unloaded directly onto a train car for transport within the United States. This demonstrates how _____ has simplified the transport of products from one mode of shipping to another.

a. Containerization

1. In the early 1960s, the U.S. was the world's dominant industrial power. How does the U.S. position compare today?

a. It has diminished in power

1. As the barriers to the free flow of goods, services, and capital fell during the 1970s, one motivation for foreign direct investment by non-U.S. firms was the desire to

a. More production to more desirable locations

The outward stock of foreign direct investment refers to the ______ of foreign investments by firms domiciled in a nation outside of that nation's borders.

a. Total cumulative value

1. A debt relief movement was in full force in the late 1990s; however, in order for these programs to have a long-term impact it is necessary for those nations receiving debt assistance to

a. invest in public projects that boost economic growth.

declining investment barriers

better ability to optimize location economies

Among developing nations, ______ has been the largest recipient of foreign direct investment

china

Which country has been the world's largest exporter since 2009?

china

1. Current trends indicate that, due to the emerging economies, the world is moving _____ an economic system that is more favorable for international business.

closer to

1. Colin told the management team that their Ohio-based company should produce the textiles for the new line of jackets in China because it would allow them to price the clothing line lower, which would then give consumers more money to spend on other items. Colin is making an argument for ______.

free trade

In the 1960s, when a customer in the United States purchased a television, that television had been manufactured in the United States. Today, thanks to the fall of international trade barriers, televisions purchased in the United States might be manufactured in China or South Korea. This change has occurred as the result of _____.

globalization

1. True or False: The development of Internet technology has lowered the barriers that small firms face in building international sales.

true

1. True or false: Many economists maintain that the power of organizations like the WTO is limited to what nation-states collectively agree to grant.

true

As emerging economies such as China, India, Russia, and Brazil continue to grow, forecasts predict a further relative decline in the share of world output and world exports accounted for by the U.S. and other long-established developed nations.

true

1. Due to globalization, firms follow each other around the world, thereby

a. Creating some uniformity across markets

The smartphone app at the heart of Uber's business illustrates how _______ has/have made the globalization of markets a reality.

Advances in communications

While it is known for its peacekeeping role, the United Nations devotes nearly 70% of its work toward promoting conditions of

Vibrant global economy

1. What is an example of an obstacle to globalization?

a. Differences in legal regulations among national markets

1. In return for offering loans, the International Monetary Fund (IMF)

a. Enforces its economic policies on nations

1. Boeing's rationale for outsourcing so much production to foreign suppliers is based on which two factors, according to the text?

a. Increasing the chance to win significant orders from airlines in those countries b. Using suppliers that are the best in the world at a particular activity

1. What is an accurate depiction of the World Bank?

a. It focuses on helping developing countries fight poverty through investments in the underlying structure of the country.

1. The development of what two transportation modes has effectively reduced the size of our world, hence simplifying the transshipment from one mode of transport to another?

a. Jet b. Superfreighters

1. What are three examples of factors of production?

a. Land labor capital entrepreneurship

1. What are two impediments to globalization that a company might face?

a. Political risk b. Transportation cost

1. What is an accurate description of the International Monetary Fund (IMF)?

a. The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil.

1. Historically, national markets were distinct and separate entities. Today, these separate national markets have merged. This process is known as _____.

a. The globalization of markets

1. What is the best way to characterize the impact of existing impediments to globalization?

a. The impediments make it difficult for companies to maximize production activities.

1. When examining the data from 1960 to 2018, how does the value of the world economy compare to the value of international trade?

a. The value of international trade had a greater increase.

1. Why do companies engage in the globalization of production?

a. To lower their overall cost structure or improve the quality of their product offering

1. The trade agreement called the _____, finalized in December 1993, established the World Trade Organization to police the international trading system.

a. Uruguay round

1. What are the four purposes of the United Nations according to its charter?

a. be a center for harmonizing the actions of nations b. cooperate in solving international problems c. maintain international peace and security d. develop friendly relations among nations

The International Monetary Fund (IMF) has been criticized for

a. compromising the jurisdiction and decision-making powers of the receiving country

1. The G20 was originally established to _____.

a. formulate a coordinated policy response to financial crises in developing countries

1. The national differences in the quality of factors of production help companies

a. improve the quality or functionality of their product offering.

1. What are two implications that are derived from the fact that the volume of world trade has been growing faster than world GDP?

a. the world has become significantly wealthier in recent decades b. more companies are dispersing production processes to different locations around the globe

The International Monetary Fund (IMF) is considered less controversial than the World Bank.

false

Apple sources parts for its iPhone from around the world before assembling the phones in China. This reflects the

globalization of production

Boeing produced just 5 percent of its original 737 and 747 outside the United States but produces 65 percent of its newer 787 in foreign locations. Boeing's production strategy reflects the _________

globalization of production

enhanced transportation technologies

lowered distance between countries

1. During the early years of globalization, outsourcing was primarily confined to _____ activities.

manufacturing